Monday, 24 June 2013

Herbert
Dow founded Dow Chemical in Midland, Michigan when he invented a way to
produce bromine cheaply. He sold the chemical for industrial purposes
all over the US for 36 cents per pound at the turn of the 20th century.
He couldn't go overseas, however, because the international market was
controlled by a giant German chemical cartel that sold it at a fixed
price of 49 cents per pound. It was understood that the Germans would
stay out of the US market so long as Dow and the other American
suppliers stayed within its borders.

Eventually Dow's business
was in trouble and he had to expand. He took his bromine to England and
easily beat the cartel's fixed price of 49 cents per pound. Things were
okay for a while until a German visitor came to Michigan and threatened
Dow that he had to cease and desist. Dow didn't like being told what to
do and told the cartel to get lost.

Shortly thereafter German
bromine started appearing for sale in the US for 15 cents per pound, way
below Dow's price. The cartel flooded the US market, offering the
chemical way below their own costs, intending to drive Dow out of
business. But Dow outsmarted them. He stopped selling in the US market
entirely and instead arranged for someone to secretly start buying up
all the German bromine he could get his hands on. Dow repackaged it as
his own product, shipped it to Europe, and made it widely available
(even in Germany) at 27 cents per pound. The Germans were wondering 1)
why wasn't Dow out of business and 2) why was there suddenly such demand
for bromine in the US??

The cartel lowered its price to 12 cents
and then 10 cents. Dow just kept buying more and more, gaining huge
market share in Europe. Finally the Germans caught on and had to lower
their prices at home. Dow had broken the German chemical monopoly and
expanded his business greatly. And customers got a wider range of places
to buy bromine at lower prices.

Dow went on to do the same trick
to the German dye and magnesium monopolies. This is now the textbook
way to deal with predatory price cutting.

Graduates of Harvard University are increasingly heading into careers
in finance, which is a bad thing. Statistics show that when Harvard
grads flock to Wall Street (when times are good and careers there appear
most attractive), the stock market falls the following year. In 2007,
for instance, 47 per cent of Harvard grads went to Wall Street, reports
the website Quartz. We all know what happened in 2008.

Austerity strikes again. Italy reported there were 1.65 million
bicycles sold in the country in 2012, compared to 1.4 million cars. It's
the first time bike sales have passed car sales in nearly 50 years in
Italy, home to Ferrari and Lamborghini. "There is a silent revolution
taking place on two wheels in our cities," said the country's transport
undersecretary last week.

Kenya is fast becoming one of African's leading hi-tech countries. It has encouraged technological landmarks like the first African electric car, and it is exploring the most of modern technological gadgets especially mobile technology.

In recent times, there has been a considerable growth of mobile technology users since 2011 in Kenya, the country will be providing Visa card-swiping machines that are attached to mobile
phones to is small business owners.

According to a report from African Business, Kenyan card users grew by 20%
to 6m from 2011 to 2012 and point-of-sale usage rose to 15% from 10%,
with cash-machine visits making up the rest of the $6bn transacted last
year and Visa's client banks increased 39% to 25.

Friday, 17 May 2013

One major problem most business executives encounter is to briefly state their company's strategy statement. No company can operate successfully without having a clear statement about their strategy.

Researchers have identified three components of a successful strategy statement: objective, scope, and advantage.

Strategic Objective
This identifies the factors that drive the business over the next few years.

Strategic Scope
A firm's scope encompasses three dimensions: customer or offering, geographic location, and vertical integration.
Boundaries make it easy to identify which activities the firm should concentrate on and which they shouldn't.

Strategic Advantage
A strategic Advantage shows what makes the company unique and different in the market.

With a clear definition of your strategy, formulation and implementation become infinitely easier-the statement will be easier to communicate, and will empower your people to raise the performance of your organization.